Fundamentals of Cost Accounting
6th Edition
ISBN: 9781260708783
Author: LANEN, William
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 17, Problem 28E
Sales Mix and Quantity Variances
The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $35. The a la carte option has a budgeted average price of $24 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $15 and the a la carte option averages $10 per meal in budgeted variable cost. The manager estimates that 2,500 people will order a meal in any month. For July, the restaurant served a total of 2,300 meals, including 950 buffet options. Total revenues were $34,200 for buffet meals and $35,100 for the a la carte meals.
Required
- a. Compute the activity variance for the restaurant for July.
- b. Compute the mix and quantity variances for July.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $52. The a la carte option has a budgeted average price of $41 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $32 and the a la carte option averages $25 per meal in budgeted variable cost. The manager estimates that 2,600 people will order a meal in any month.
For July, the restaurant served a total of 2,400 meals, including 940 buffet options. Total revenues were $49,820 for buffet meals and $62,780 for the a la carte meals.
Required:
a. Compute the activity variance for the restaurant for July.
The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat
buffet and an a la carte option, where diners can order from the menu. The buffet
option has a budgeted meal price of $50. The a la carte option has a budgeted
average price of $39 for a meal. The restaurant manager expects that 40 percent of its
diners will order the buffet option. The buffet option has a budgeted variable cost of
$30 and the a la carte option averages $23 per meal in budgeted variable cost. The
manager estimates that 2,000 people will order a meal in any month.
For July, the restaurant served a total of 1,800 meals, including 600 buffet options.
Total revenues were $30,600 for buffet meals and $50,400 for the a la carte meals.
Required:
a. Compute the activity variance for the restaurant for July.
b. Compute the mix and quantity variances for July.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute the activity variance for the…
The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $48. The a la carte option has a budgeted average price of $37 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $28 and the a la carte option averages $23 per meal in budgeted variable cost. The manager estimates that 2,000 people will order a meal in any month.
For July, the restaurant served a total of 1,800 meals, including 700 buffet options. Total revenues were $34,300 for buffet meals and $41,800 for the a la carte meals.
Required:
a. Compute the activity variance for the restaurant for July.
b. Compute the mix and quantity variances for July.
Chapter 17 Solutions
Fundamentals of Cost Accounting
Ch. 17 - What complication arises in variance analysis when...Ch. 17 - Variance analysis can be useful in a manufacturing...Ch. 17 - How would you recommend accounting for variances...Ch. 17 - What does a manager learn by computing an industry...Ch. 17 - Why is there no efficiency variance for revenues?Ch. 17 - For what decisions would a manager want to know...Ch. 17 - If the sales activity or materials efficiency...Ch. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - What is the advantage of recognizing materials...
Ch. 17 - How could a professional sports firm use the mix...Ch. 17 - Prob. 12CADQCh. 17 - How could a hospital firm use the mix variance to...Ch. 17 - Prob. 14CADQCh. 17 - There is no reason to investigate favorable...Ch. 17 - Prob. 16CADQCh. 17 - Consider a firm in the sharing economy, such as...Ch. 17 - Prob. 18ECh. 17 - Prob. 19ECh. 17 - Prob. 20ECh. 17 - Variable Cost Variances: Materials Purchased and...Ch. 17 - Prob. 22ECh. 17 - Industry Volume and Market Share Variances DB Ice...Ch. 17 - Olive Tree Products sold 72,000 units during the...Ch. 17 - Prob. 25ECh. 17 - Sales Mix and Quantity Variances A-Zone Media...Ch. 17 - Prob. 27ECh. 17 - Sales Mix and Quantity Variances The restaurant at...Ch. 17 - Sales Mix and Quantity Variances Chow-4-Hounds...Ch. 17 - Materials Mix and Yield Variances Stacy, Inc.,...Ch. 17 - Materials Mix and Yield Variances Johns...Ch. 17 - Labor Mix and Yield Variances Matts Eat N Run has...Ch. 17 - Flexible Budgeting, Service Organization KB is a...Ch. 17 - Prob. 34ECh. 17 - Prob. 35ECh. 17 - Sales Price and Activity Variances EZ-Tax is a tax...Ch. 17 - Write a memo to the senior manager of EZ-Tax...Ch. 17 - Variable Cost Variances The standard direct labor...Ch. 17 - Refer to the information in Exercise...Ch. 17 - Prob. 40PCh. 17 - Variable Cost Variances: Materials Purchased and...Ch. 17 - Industry Volume and Market Share Variances:...Ch. 17 - Industry Volume and Market Share: Missing Data The...Ch. 17 - Sales Mix and Quantity Variances Lake Cellars...Ch. 17 - Analyze Performance for a Restaurant Dougs Diner...Ch. 17 - Nonmanufacturing Cost Variances FSBCU is a...Ch. 17 - Performance Evaluation in Service Industries Bay...Ch. 17 - Refer to the information in Problem...Ch. 17 - Prob. 49PCh. 17 - Refer to the data for the Peninsula Candy Company...Ch. 17 - Materials Mix and Yield Variances Plano Products...Ch. 17 - Pinnuck Products makes a liquid solvent using two...Ch. 17 - Labor Mix and Yield Variances Matthews Bros, is a...Ch. 17 - Refer to the information in Problem...Ch. 17 - Derive Amounts for Profit Variance Analysis...Ch. 17 - Flexible Budget Oak Hill Township operates a motor...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- The restaurant at the Hotel Galaxy offers two choices for breakfast: an all-you-can-eat buffet and an a la carte option, where diners can order from the menu. The buffet option has a budgeted meal price of $37. The a la carte option has a budgeted average price of $26 for a meal. The restaurant manager expects that 40 percent of its diners will order the buffet option. The buffet option has a budgeted variable cost of $17 and the a la carte option averages $12 per meal in budgeted variable cost. The manager estimates that 2,100 people will order a meal in any month. For July, the restaurant served a total of 1,900 meals, including 640 buffet options. Total revenues were $25,600 for buffet meals and $34,020 for the a la carte meals. Required: a. Compute the activity variance for the restaurant for July. b. Compute the mix and quantity variances for July. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for…arrow_forwardA restaurant budgets 24% of sales for variable costs, 12% for fixed costs, and 5% for profit. One of the dishes on the menu has a cost per portion of $3.27 and a direct labor cost of $0.97. Using the actual pricing method, what is the appropriate sales price for this dish?arrow_forwardQ. 8arrow_forward
- 8. Determine the price variance ($). Note: The Answer field only accepts numbers. Thus, do not include $ or commas when you type your answer. Type your answer as a whole number. Assume that your hotel has a restaurant. The restaurant projected 3,000 lunches to be sold for September at an average price of $5.50. The actual sales were 3,200 meals and food revenue of $18,400. Use the information above and the table below to solve the questions. Meals (# of units) Price/unit Total Revenue Budget 3,000 $5.5 ? Actual 3,200 ? $18,400arrow_forwardmixed costs will be incorrect. IIIE VUI Tum the cost is used to develop the flexible budget benchmark. Problem: Variance Analysis Using a Flexible Budget Harrald's Fish House is a family-owned restaurant that specializes in Scandinavian-style seafood Data concerning the restaurant's monthly revenues and costs appear below (g refers to the number of meals served): Formula $16.50q $6.25q $10,400 $800 + $0.20q $2,200 $600 + $0.80q Revenue Cost of ingredients Wages and salaries Utilities. Rent. Miscellaneous. Required: 1. Prepare the restaurant's planning budget for April assuming that 1,800 meals are served. 2. Assume that 1,700 meals were actually served in April. Prepare a flexible budget for this level of activity. 3. The actual results for April appear below. Prepare a flexible budget performance report for the restaurant for April. $27,920 $11,110 $10,130 $1,080 $2,200 $2,240 Revenue. Cost of ingredients. Wages and salaries. Utilities. Rent.. Miscellaneousarrow_forwardHh1. Account need help with requirement B!arrow_forward
- Cheesecake Etc. is considering on expanding their menu selection by adding the following products shown in the table below. Their annual fixed costs is Php 50,000. The shop is open for 25 days per month. Monthly demand from a similar store is used as shown in the table. Price per Variable Estimated Item Cost Demand Chicken Salad Clubhouse Sandwich Carbonara Muffin Hot Chocolate serving * 185.00 - 155.00 - 175.00 6.50 250 7.40 220 9.75 180 65.00 3.25 120 55.00 2.45 240 Compute for the following: a. What is the monthly break-even point? Php Blank 1 Remarks (0): Round off up to 2 decimal places b. Units to be sold monthly to break-even? Chicken Salad = Blank 2 Clubhouse Sandwich = Blank 3 Carbonara = Blank 4 Muffin = Blank 5 Hot Chocolate = Blank 6 Remarks (b): Express final answer as a whole number Blank 1 Add your answer Blank 2 Add your answer Blank 3 Add your answer Blank 4 Add your answer Blank 5 Add your answer Blank 6 Add your answerarrow_forwardService yield pricing and differential equations Cityscape Hotels has 200 rooms available in a major metropolitan city. The hotel is able to attract business customers during the weekdays and leisure customers during the weekend. However, the leisure customers on weekends occupy fewer rooms than do business customers on weekdays. Thus, Cityscape plans to provide special weekend pricing to attract additional leisure customers. A hotel room is priced at 180 per room night. The cost of a hotel room night includes the following: The special weekend price is proposed for 120 per room night. At this price, it is anticipated that average occupancy for the weekend (Friday, Saturday, and Sunday) will increase from 30% to 50% of available rooms. a. What is the contribution margin for a room night under the normal pricing if only the hotel depreciation and hotel staff (excluding housekeeping) are assumed fixed for all occupancy levels? b. Determine the contribution margin for a room night under the proposed weekend pricing. c. Prepare a differential analysis showing the differential profit for an average weekend between the existing (Alternative 1) and discount (Alternative 2) price plans. d. Should management accept the proposed weekend pricing plan? Explain.arrow_forwardThe Sea Wharf Restaurant would like to determine the best way to allocate a monthly advertising budget of 1,000 between newspaper advertising and radio advertising. Management decided that at least 25% of the budget must be spent on each type of media and that the amount of money spent on local newspaper advertising must be at least twice the amount spent on radio advertising. A marketing consultant developed an index that measures audience exposure per dollar of advertising on a scale from 0 to 100, with higher values implying greater audience exposure. If the value of the index for local newspaper advertising is 50 and the value of the index for spot radio advertising is 80, how should the restaurant allocate its advertising budget to maximize the value of total audience exposure? a. Formulate a linear programming model that can be used to determine how the restaurant should allocate its advertising budget in order to maximize the value of total audience exposure. b. Develop a spreadsheet model and solve the problem using Excel Solver.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Essentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
What is Risk Management? | Risk Management process; Author: Educationleaves;https://www.youtube.com/watch?v=IP-E75FGFkU;License: Standard youtube license